2 Major Things You Have to Do before Applying for the FHA Loans
Purchasing a house is crucial. It is not just place where you seek shelter but it is one of the most significant investments in one person’s life which can help you fetch good returns. However, making this kind of an investment is easier said than done. You have to cross several hurdles to make way for the perfect home that you want. And one of the most vital among these is gathering the funds for the house. Most of us don’t have that kind of savings which will enable us to finance our home. That is why it is crucial that you opt for a home loan program so that your dream of owning a house doesn’t get ruined.
There are several kinds of home loans which you can apply for to finance the dream house in your mind. But that also requires a number of factors to qualify first and your credit history is one of the most important ones. A lot of people get disqualified before even applying for the loan because of a high debt ratio to their income, which means they have a poor credit record. If you are a first-time home buyer, you can try out the FHA loans for bad credit.
So, how do you apply for the FHA loans? Here are a few things you have to do first. Take a look.
Keep a Decent Credit Score Ready
As already mentioned before, you have to maintain a certain kind of credit record in order to be eligible for the home loan programs, for the FHA loans too, you need to prepare with a certain credit score. But since the Federal Housing Administration has initiated the FHA loans for people suffering due to bad credit, the credit score requirement for this loan is quite flexible. All you need to have is a keep a credit score above 500. If your score is between 500 and 579, you have to pay a 10 percent of down payment but if the score is above 580, then you can get it with just 3.5% down payment. In fact, if your score is below 500, then too, you can become eligible for the home loan with the twelve-month worth of alternative credit record from 3 separate nontraditional credit history accounts.
Get Your Mortgage Lender Approved
Another very crucial point to keep in mind while applying for the FHA loans is that you need to get the mortgage lender lending the FHA loan to you approved by the Federal Housing Administration. You should be aware that the FHA is not a lender but just an insurance fund. Borrowers have to get their loan only from a mortgage lender approved by them. Be careful about your choice because all FHA-approved lenders will not provide you with the same rate of interest and costs despite it being the same FHA loan.
So, if you have taken these down, quickly start looking for the FHA loans at the best interest rates in Houston to turn your dream home into a reality.